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Nearly a dozen retailers — including department store chains and shoe brands — have filed for bankruptcy protection so far this year, shuttering many of their stores — if not all of them.
The pace is slower than last year, when more than 20 retailers including Toys R Us, Hhgregg, and Gymboree filed for bankruptcy protection. But it's no less painful for the employees and landlords who find themselves stuck in the middle as the retail landscape continues to evolve.
On Friday, Mattress Firm became the latest company to head down this path, as the largest mattress retailer in the U.S. grapples with how to trim its footprint of more than 3,000 stores. It's initially planning to close as many as 700 locations, with roughly 200 stores expected to go dark as soon as "the next few days." The company, owned by Steinhoff International Holdings, said it expects to complete a prepackaged restructuring within 45 to 60 days.
The closures by Mattress Firm, Toys R Us and other bankrupt brands are only adding to the glut of retail real estate that sits vacant across the U.S.
A new report from real-estate research firm Reis, released earlier this week, said U.S. mall vacancy rates climbed to 9.1 percent during the third quarter, their highest level in seven years. The group said closures from Bon-Ton and Sears Holdings accounted for much of the jump in empty storefronts. Sears, having already shuttered hundreds of locations, has a large debt payment hanging over its head due Oct. 15, which could push the company into bankruptcy if it doesn't find a solution to restructure the business.
Toys R Us, meanwhile, could see another day. Its bankruptcy auction was recently put off as a group of hedge funds is considering reviving the business, bidding for the Toys R Us and Babies R Us brand names.
According to a list compiled by Moody's, retailers at risk of defaulting on loan payments — and therefore could be forced to file for bankruptcy — include 99 Cent Only Stores, Charlotte Russe, Guitar Center and Payless ShoeSource, which once filed for bankruptcy protection but later emerged after closing more than 600 stores. Below is the list of retailers that have filed for bankruptcy protection so far this year, some of which have already managed to emerge.
Mattress Firm, the largest mattress retailer in the U.S., filed for Chapter 11 bankruptcy protection on Friday. The company said it plans to shut as many as 700 of its 3,500 stores, as it expects to emerge from a prepackaged restructuring within 45 to 60 days. It said 200 of those stores will close as soon as "the next few days." The company, owned by Steinhoff International Holdings, also said it's seeking court authorization to pay suppliers and contractors in full for all services provided before and after its bankruptcy filing. Mattress Firm ultimately hopes it will be able to restructure it business and get out of unwanted leases.
National Stores — a discount retailer started in Los Angeles that owns the Fallas, Conway and Anna's Linens brands — filed for Chapter 11 bankruptcy protection in August. The company said that, as a result, it plans to shutter 74 of its more than 340 stores across the U.S. and Puerto Rico. In accumulating a house of brands over the years, National Stores is viewed as taking on too much debt, which ultimately dragged the overall business down. Many of its locations today are situated in open-air or standalone shopping centers.
Gump's Holdings, a San Francisco-based department store operator, filed for Chapter 11 bankruptcy protection in August, after it wasn't able to find a buyer or financing to keep it afloat. The company said in a press release that an "overwhelmingly difficult retail environment" brought many obstacles to its business. In addition to its flagship store in San Francisco, Gump's has a catalog and runs its own website. The retailer is still planning to search for a buyer, but it's already brought in liquidators to get rid of some merchandise and repay creditors.
Brookstone filed for Chapter 11 bankruptcy protection in August. The retailer, known for selling massage chairs and other tech gadgets and giftable items, is planning to shutter its 101 locations in U.S. shopping malls as a result. Brookstone is currently searching for a buyer for its airport locations, along with its e-commerce business and wholesale operations. Those will remain running during the scouting process.
Shoe company Rockport Group filed for Chapter 11 bankruptcy protection in May, following similar moves by peers in the shoe industry like Nine West and Payless. Rockport agreed to sell itself to private-equity group Charlesbank Capital Partners, a deal that was completed in July. As part of the sale, Charlesbank took over Rockport's wholesale business. The Rockport brand is sold by retailers in more than 60 countries. Charlesbank meanwhile has stakes in other businesses like the Princeton Review, Shoppers Drug Mart, and Papa Murphy's Take 'N' Bake Pizza stores.
Footwear and apparel company Nine West filed for bankruptcy in April, announcing at the time that it planned to sell some of its brands to Authentic Brands Group and shutter all 70 of its brick-and-mortar shops. The bankrupt retailer has since asked investment bank Lazard to help it explore a sale of its remaining assets, which include its jeans and jewelry businesses, along with the Anne Klein and Kasper brands, Reuters reported in July. Nine West has been hurt as some of its retail partners — chiefly department store chains — shutter stores or go bankrupt altogether.
Accessories chain Claire's filed for Chapter 11 bankruptcy protection in March, with plans to trim its debt by nearly $2 billion. The mall-based retailer — owned by private-equity firm Apollo Capital Management — struggled with a steep debt load it was unable to maintain as purchases increasingly shifted online and its sales declined. Claire's said it will continue to run its roughly 1,600 Claire's and Icing-branded shops across the U.S. during the bankruptcy process, which it said should be able to emerge from as soon as this month.
The Walking Company filed for Chapter 11 bankruptcy protection in March, making it the second time the company did so within the span of a decade. Early in July, however, the shoe retailer managed to emerge from Chapter 11 with more than $10 million of equity, according to a press release. The company has almost 200 stores, primarily in shopping malls, across the U.S. It also owns Abeo, a type of shoe that can be customized to match the shape of a customer's foot.
Department store chain Bon-Ton filed for Chapter 11 bankruptcy protection in February, with the goal at the time of selling the business while it trimmed some of its real estate portfolio. Ultimately, the retailer was forced into liquidation when a bid by mall owners fell through. It is currently in the process of shuttering its more than 200 locations across the U.S. within shopping malls. Other banners owned by Bon-Ton include Carson's, Younkers and Elder-Beerman.
Kiko USA, a cosmetics company and subsidiary of Kiko Milano, filed for Chapter 11 bankruptcy protection in mid-January with plans to restructure the business by closing almost all of its stores. It had nearly 30 locations in the U.S. at the time, many within shopping malls. The beauty brand has said its international business is still strong and growing. In America, Kiko struggled to negotiate with landlords over lower rents or terminating leases early.
Women's apparel retailer A'gaci filed for Chapter 11 bankruptcy protection in January. At the time, the company said it would talk to real estate owners to try to negotiate deals on 49 of its 76 stores. The company said in a press release that roughly two-thirds of its lease costs were "unfavorably high." Following those discussions, earlier this summer, A'gaci announced it would keep 55 stores open as it emerged from Chapter 11. The company said it still has 1,500 employees.